On October 3, 2012, the Supreme Court of the United States heard oral arguments in a case whose outcome may change federal takings and the just compensation owed property owners subjected to a temporary physical taking by the government. In Arkansas Fish & Game Commission v. United States (No. 11-597), the court is considering whether the temporary, but reoccurring downstream flooding events caused from dam releases by the Army Corps of Engineers, constituted a “taking” of property warranting payment of just compensation.

The Fifth Amendment to the U.S. Constitution, in part, protects property owners from government abuse by requiring the government pay just compensation for any takings of private property put to public use. Generally, the Supreme Court has held that “where government requires an owner to suffer a permanent physical invasion of her property – however minor – it must provide just compensation” (Lingle v. Chevron U.S.A., 544 U.S. 528, 538(2005)). However, a clear and consistent rule has yet to be articulated for the reverse situation. That is to say, what standard applies where the invasion is temporary, but the damage inflicted to the property is permanent? Arkansas Fish & Game Commission may well provide such needed clarity.

In its amicus brief to the Supreme Court, the National Association of Home Builders (NAHB) supported a grant of certiorari and urged the court to ultimately hold that a temporary physical occupation can indeed result in a compensable taking.

Arkansas Fish & Game Commission deals with the periodic release of water from a dam by the Army Corps of Engineers over a six year period. The result of the release was downstream flooding that permanently destroyed the Commission’s timber resources and compromised the land’s usage as an important wildlife habitat. The lower court awarded the Commission $5.6 million in compensation, while on appeal, the Federal Circuit Court reversed and essentially arrived at a per se test that forgoes the need for just compensation in temporary physical occupations.

The Federal Circuit Court’s per se rule found that a temporary taking occurs only when the flooding is inevitably recurring. However, NAHB argues in its brief that a string of court precedent points to the fact that a variety of temporary physical taking circumstances can trigger compensatory payment from the government – the court has just not yet defined a broadly applicable rule. NAHB concedes that a per se rule should likewise not be utilized to justify a taking anytime a temporary occupation occurs. Rather, a balancing test should be employed by the courts that accounts for both the physical impact caused by the occupation as well as the occupation’s duration.

In fact, in advocating for a balanced, middle-ground approach, NAHB points to a previous Federal Circuit Court decision for guidance: McKay v. United States, 199 F.3d 1376 (Fed. Cir. 1999). In McKay, the court determined a temporary physical takings had occurred as a result of damage caused by ground water monitoring wells placed on a property owner’s land. The court examined the monetary and physical damages cause by the wells in arriving at its decision.

The Supreme Court is expected to rule on Arkansas Fish & Game Commission in the upcoming weeks.

Source: In the Zone